$QQQ: Nasdaq’s Ratio-Adjusted McClellan Oscillator was at -95 on Thursday, October 12th. In the last 20 years (>5000 trading days), there have only been 8 readings lower than that.
$VIX: Spot VIX Index on Friday was still above all of its futures contracts, which is a sign of a washout bottom.
Liquidity: It has marked a bottoming condition for prices when it has been this low before, e.g. 2009, July 2011, Jan. 2016..
Internals
Moores’ 2CP: sitting at 21 for now, lowest reading that has been hit during this correction was 16.3, on Tuesday, October 16th. For comparisons purposes, lowest level hit this year, was on March 28. TNA closing price for that day was 65.40 and Moores’ 2CP hit 9.5. This information is relevant, a 2C-P lower than 9.5 combined with TNA closing price above 65.40 should be considered bullish.
Expirations: for this week is still looking down, next weeks are looking flat, so any call using 11/02 expiration on SPX should not be productive. We need more information from OI to make a clear call.
FNG’s cycles: are showing a bottoming action into this week, followed by a rally until November 7th or 8th.
$BPSX: continue trading at bottoming áreas, very oversold.
Volatility: Weekly, is trading below lower bollinger bands and still could spike down, for that reason we need to continue watching support and resistance on SPX. Daily volatility is low enough to indicate a bottom in place, at least for a b wave up to 2860. I stress that if we see 2860 and a C wave down develops, there is not actual support we can talk about
Princely’s ONE-VXO, still at reversal area, no change on this medium term indicator.
EW analysis
October 10th
For the close, after hours market is facing all what we could give; SPY is closing at 276.09 (Altlink2); QQQ is at 169.86 (Altlink2) while SPX futures are at 2769, too close to 2760 (Altlink2).
While SPY has scarcely held 276, QQQ has held more consistently the 169.86 line. For the market to rally at least to 2860 is necessary to take 2809 and 2821 on SPX. There is serious risk for the market to go fast to 2680 or lower on a break below 2748.3, until then this level is broken, price action looks more like a bottoming scenario.
$QQQ should go for 183.60 or 186.22 to complete a full retrace off the lows. If these b waves play out, should be a good opportunity to get liquidity back.
$SPX Stocks on SAR buy signals 198, improved
$NDX stocks on Sar Buy Signals 43, good improvement
$SPX Stocks closing above T line 162, has certainly improved.
$NDX Stocks closing above T line 21, improved
CNN Fear & Greed = 14 Extreme Fear
Have a nice day.
Carlos
Seeking Options Team
Seeking Options Team – RQLAB Please email us if you want to be part of this group at [email protected]
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